Your tax return could get rejected if final 12 months’s submitting is pending

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Should you’re one of many hundreds of thousands of Individuals nonetheless ready in your 2020 tax return, you may have to take a particular step to keep away from a rejection for this 12 months’s digital submitting, in response to the IRS.

When submitting digitally, you validate your return with the earlier 12 months’s adjusted gross revenue. Usually, your tax submitting software program has these particulars if you happen to’re a returning buyer. In any other case, you’ll be able to manually enter the numbers.

Nevertheless, the validation course of modifications with a pending 2020 return.

If final 12 months’s return continues to be in limbo, you may have to enter $0 to your 2020 AGI when submitting on-line, mentioned Nationwide Taxpayer Advocate Erin Collins in a listening to with the Home Methods and Means Oversight Subcommittee.

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“That approach you’ll be able to file electronically, and you do not have to file a paper return,” she mentioned. “We have to get that message out to taxpayers.”

Whereas these instructions solely apply to digital filers, the company urges everybody to file electronically with direct deposit to keep away from delays.

Practically 94.3% of particular person tax returns have been filed electronically through the fiscal 12 months 2020, in response to the IRS.

And there are related directions for nonfilers, who sometimes embrace sure Social Safety recipients or these with yearly revenue beneath the usual deductions.

Should you used the nonfiler software in 2021 to gather the advance little one tax credit score funds or your stimulus examine, the IRS says to place $1 for final 12 months’s AGI.  

“I might suppose hardly anyone is aware of about that one,” mentioned licensed monetary planner Larry Harris, director of tax companies at Parsec Monetary in Asheville, North Carolina.

Should you do not comply with these directions, the IRS could not settle for your digital return, mentioned Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“We have seen that from people making an attempt to file themselves,” he mentioned, explaining how AGI conflicts could set off a complicated rejection e mail from their tax-filing software program.  

‘Lacking return’ notices

Your return can also be pending if you happen to obtained a CP80 discover a couple of lacking 2020 return.

Should you obtained this discover and it nonetheless hasn’t been accepted, it is best to enter $0 to your 2020 AGI when submitting this season, mentioned Lucas.

“They are going to present $0 of their system, so that is what I might begin with,” he mentioned. 

But when the IRS rejects your return with a 2020 AGI of $0, they could have processed final 12 months’s return after sending the discover, Lucas mentioned, which suggests you’ll be able to refile your 2021 return together with your precise 2020 AGI.

Whereas it could be troublesome to succeed in the IRS by cellphone, you’ll be able to double-check the standing of your 2020 tax return by downloading a free IRS transcript out of your on-line account.

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